Cash in the Fast Lane: Muthoot Capital Raises ₹1.36B via Securitization

Muthoot Capital Services Ltd (NSE: MUTH.NS), a leading non-banking financial company (NBFC) specializing in two-wheeler and small-ticket consumer financing, has successfully raised ₹1.36 billion through securitization transactions. This strategic move is aimed at strengthening its liquidity position and expanding its lending capacity amid rising demand for affordable credit in semi-urban and rural markets.

 

The funds were mobilized by pooling and selling receivables from its existing loan portfolio to investors, a common practice among NBFCs to unlock capital and manage balance sheet efficiency.

 

What Is Securitization?

Securitization is a financial process where an NBFC packages its loan receivables into marketable securities and sells them to investors. This allows the company to:

For Muthoot Capital, this ₹1.36 billion infusion comes at a time when credit demand is surging, especially in the two-wheeler and used vehicle segments.

 

Strategic Importance

Muthoot Capital has a strong presence in South India and is known for its deep reach into Tier-2 and Tier-3 cities. The company’s core lending segments include:

The securitization proceeds will be used to scale these verticals, enhance customer acquisition, and support digital lending initiatives.

 

In recent quarters, Muthoot Capital has been focusing on improving asset quality, reducing gross NPAs, and expanding its digital footprint. The company has also benefited from its association with the Muthoot Group, which provides access to a vast branch network and customer base.

 

Financial Snapshot

As of July 2025, Muthoot Capital’s share price stood at ₹306.45, with a market capitalization of approximately ₹506 crore. The company has shown consistent profitability, with a net profit of ₹6.42 crore in the March 2025 quarter, despite a challenging interest rate environment.

 

Key financial metrics include:

The company’s cost structure remains lean, with interest expenses accounting for 47.4% of operating revenue and employee costs at 20.17%.

 

Management Commentary

While the company has not issued a formal statement on the securitization deal, industry analysts view the move as a proactive step to ensure liquidity and maintain growth momentum.

 

“Securitization is a smart way for NBFCs like Muthoot Capital to recycle capital and stay agile in a competitive lending environment. It reflects confidence in the underlying asset quality and investor appetite for retail loan pools,” said a senior analyst at Kotak Securities.

 

Outlook

With the ₹1.36 billion raised, Muthoot Capital is expected to:

The company’s next board meeting is scheduled for August 5, 2025, where quarterly results and strategic updates are expected to be discussed.

 

Sources: The Economic Times, Screener, Investing.com